DraftKings co-founder and CEO Jason Robins has confirmed the operator’s new prediction markets platform will offer sports event contracts, but only in states where it doesn’t already operate a sportsbook.

Late last month, the operator acquired Commodity Futures Trading Commission-licensed Railbird to accelerate its expansion into prediction markets and said it will launch a standalone app called DraftKings Predictions in the coming months.

While there was no mention of sports event contracts in that announcement – only finance, culture and entertainment contracts were used as examples – it did note that additional categories would be added over time.

In a note to shareholders alongside the release of the Boston-based firm’s Q3 results on Thursday, 7 November, Robins said predictions remains “relatively small” in sports betting right now but confirmed the plan to launch sport event contracts in “many states” where it is not operational with a sportsbook.

He said: “We have experienced numerous waves of competition in recent years, mostly from well capitalised companies that have built or acquired strong sports betting product offerings, and those have had minimal impact on DraftKings’ revenue trajectory.

“By comparison, predictions is structurally limited, lacking the depth and breadth of a sports betting offering. There are also numerous data points from around the globe that validate that predictions, in sports, is relatively small and largely incremental relative to traditional sports betting.

“In actuality, we see predictions as a significant incremental opportunity. We are excited about our pending launch of DraftKings Predictions and its potential to expand our total addressable market.

“In the coming months, we expect DraftKings Predictions to enter many states with sport event contracts, unlocking a new customer base and revenue stream.

“Nearly half the country’s population remains without access to legal online sports betting, but there are several other companies offering federally regulated predictions in all 50 states.

“As growth in predictions continues, this may also motivate more states to legalise online sports betting and igaming with reasonable regulation and taxation.”

Financially, DraftKings revised its full-year 2025 guidance after posting Q3 revenue of $1.1bn, which did not meet analyst expectations of $1.2bn.

The 4% year-on-year (YoY) increase was down to ongoing customer engagement, acquisition of new customers and higher structural sportsbook hold percentage, the operator said.

However, the growth was partially offset by customer-friendly sport outcomes of over $300m for the three months ending 30 September. There was a decline in adjusted EBITDA at $126.5m.

In igaming, Q3 net revenue rose 25% YoY to $451.3m, which was “the fastest growth we’ve experienced since the first quarter of 2024”.

Sportsbook revenue stood at $596.1m, down from $656.9m the year prior, with a net revenue margin of 5.2%. Sportsbook handle amounted to $11.4bn.

Meanwhile, monthly unique payers (MUPs) grew 2% YoY to 3.6 million. Excluding Jackpocket, MUPs grew 6%.

Average revenue per MUP (ARPMUP) also saw an increase of 3% YoY due to increased revenue in igaming and improved sportsbook hold percentage.

Bullish

Commenting on the results, Robins said: “This is the most bullish I have ever felt about our future.

“Underlying growth in the business is accelerating and we are excited to launch DraftKings Predictions in the coming months, which we view as a significant incremental opportunity.”

Alan Ellingson, DraftKings CFO, added: “With handle growth accelerating and parlay handle mix continuing to increase, we are excited about the trajectory of our free cash flow.

“We continue to focus on maximizing shareholder returns and are pleased to announce that our board authorized an increase in our share repurchase program from $1.0bn to $2.0bn.”

On the back of the operator’s Q3 results, FY 2025 revenue guidance is expected to come in between $5.9bn to $6.1bn, down from the previous $6.2bn to $6.4bn.

Adjusted EBITDA guidance has also been revised to $450m to $550m.

Guidance includes financial impacts from the planned Missouri launch in December and the expected launch of DraftKings Predictions.

DraftKings is currently live with online sports betting in 25 states and Washington DC, with plans to launch in Missouri when the market goes live in December pending market access, licensure and regulatory approval.

Igaming is live in five states, Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia, while both its products are available in Ontario, Canada as well.

Ahead of its results announcement yesterday, it was confirmed that DraftKings will be the new official sportsbook partner for ESPN, after PENN Entertainment terminated its agreement with the media network’s parent company Disney, marking an end to the ESPN Brand.

Investors were unimpressed with the Q3 announcement, though, with DraftKings shares tumbling nearly 8% in after-hours trading in New York.

The post DraftKings Predictions will launch with sports events contracts, confirms CEO first appeared on EGR Intel.